Risk, Leadership and Management: A Case Study of an Aged Care Organisation

Introduction

In the challenging environment of aged care, effective risk management is paramount to ensuring the safety and well-being of both residents and staff. However, many organisations struggle with poor risk management practices, leading to various challenges such as high staff turnover and operational inefficiencies. This case study delves into the journey of an aged care organisation grappling with these issues and how a consultancy intervention transformed their approach to risk management.

Background

The Aged Care organisation, a mid-sized facility catering to the elderly population in both assisted and residential care facilities for the elderly, faced significant challenges in recent years. The board acknowledged the inadequacy of the existing framework and combined with significant challenges at Senior Management and Executive Level, including staff turnover, necessitated the Board to take a more active role and step down into operational oversight at the expense of a greater focus on strategic oversight.  The trickle-down effect was disengaged staff and high turnover rates at both frontline and senior management levels. This jeopardised profitability and the maintenance of registered status. In response, the Board sought transformative solutions to enhance risk recognition, ensuring a more effective and sustainable future for the organisation.

Challenges Faced

  1. Board Micromanagement: The board’s involvement in day-to-day operations hindered their ability to work with and advise management leaving little room for effective risk management oversight.
  1. High Staff Turnover: Disengaged employees, coupled with a lack of leadership development, led to a revolving door of staff, affecting leadership, resident care and organisational stability.
  1. Poor Risk Management: The existing risk management framework was outdated, reactive, and failed to address emerging risks effectively, leaving the organisation vulnerable to potential crises. As a result, many sites had developed their own approaches which did not move in line with the changing regulatory environment.

Consultancy Intervention

There was a poor understanding and recognition of risk management within the broader organisation. The Board recognised the need to provide a stronger framework that focused on the key risks and that could be readily understood by the broader organisation. Recognising this urgent need for change, the board engaged with ACN, and the consultancy’s approach was multifaceted, starting with understanding and addressing the root cause of the current risk management results.

  1. Board Development: The consultancy conducted an integral assessment followed by a workshop and coaching sessions with the Executive Leadership Team members to redefine their roles and responsibilities, emphasising strategic oversight and governance rather than operational involvement. This included focusing the board on re-defining the core strategic risks that need to be managed to ensure strategic priorities remained on track.
  1. Integral Risk Analysis: A comprehensive integral risk analysis was conducted to identify and prioritise key risks facing the organisation. This analysis encompassed operational, financial, regulatory, and reputational risks, providing a holistic view of the organisation’s risk landscape. ACN’s process looks at both Objective and Subjective factors, not just the usual suspects. This enabled the Board to see how cultural factors acted as a threat that required better management.
  1. New Risk Framework Design: Building upon the insights gained from the integral risk analysis, the consultancy collaborated with the board to design a new risk management framework tailored to the organisation’s specific needs and context. This framework emphasised proactive risk identification, assessment, and mitigation strategies, supported by robust reporting mechanisms. ACN used a Risk platform provided by their partners GOAT Risk., an award-winning solution aimed at giving organisations better data and reporting how risk is being managed.
  1. Leadership Development: Recognising the critical role of leadership in driving organisational change, the consultancy designed and delivered tailored leadership development programs for senior executives and middle managers. These programs focused on fostering a culture of accountability, innovation, and continuous improvement, aligning with the organisation’s strategic objectives. This included a Pathway programme to provide basic management training for all supervisors and then a Leadership Development programme. Both of these programmes are designed to be customised to meet the needs of individual organisations AND the regulatory requirements to support the development of key team members.
  1. Manager Training: Frontline managers were provided with specialised training on risk awareness, incident reporting, and crisis management protocols to empower them to effectively manage and lead risks at the operational level.

Outcomes

The consultancy intervention yielded significant improvements across various facets of the organisation:

  1. Strategic Focus: The board transitioned from micromanagement to strategic governance, enabling more effective oversight and decision-making.
  1. Reduced Staff Turnover: Leadership development initiatives resulted in increased employee engagement, reduced turnover rates, and improved staff morale.
  1. Enhanced Risk Management: The implementation of the new risk management framework facilitated proactive risk identification and mitigation, reducing the organisation’s exposure to potential crises.
  2. Operational Efficiency: Improved risk management and leadership practices translated into streamlined operations, cost savings, and enhanced service delivery to residents.

Measurable Results

Business Viability: Returned to profit for the first time since 2018. They are now an employer of choice in the Sector and have won awards for these results including being recognised as  change champion 2023 for their approach.

Staff Turnover: Care Industry Average is approximately 40% turnover of frontline staff – from a starting point around 35%+ their average is now between 1.2% and 3.5% on sites.

Leadership Development Programme: Overall, 77.2% of respondents noted moderate to exceptional improvements in those who were in the first cohort. Several have now been promoted or provided opportunities to step up into interim senior management positions.

WHS : An 80% decrease in open claims and those remaining staff are all still working in the organisation on ‘fit for pre-injury duties’, ‘full time hours’ with restrictions, or restricted hours.

Medical Treatment Frequency Incident Rate (MTFIR): Measures the number of medical treatment injuries per million hours worked during a single year. The 12-month rolling MTI has a 33% improvement .

Business Insurance: A cost increase of 18.6% had previously been highlighted in FY as a possibility, however we were able to reduce this to an increase in premium of only 9.7% by demonstrating strong risk management and awareness of risks.

Training Data  : 98% of all online compliance training modules assigned to staff have been successfully completed.

Conclusion

Through a collaborative effort between ACN and the organisation’s leadership, this Aged Care organisation underwent a transformative journey, moving from a state of poor risk management and operational challenges to one of strategic alignment, organisational resilience, and enhanced care delivery. This case study underscores the critical role of effective risk leadership and management development in ensuring the long-term sustainability and success of aged care organisations.

 

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